SThree plc issues Interim Management Statement
SThree plc ("SThree" or the "Group"), the international specialist staffing business, issues an Interim Management Statement for the period from 1 June 2010 to date. The financial data relates to the three month period ending 29 August 2010, being the third quarter of the financial year ending 28 November 2010.
All markets now improving and in growth, with the exception of Benelux which is nonetheless on an improving trend
Permanent Gross Profit up 36%* year on year and up 18%* on Q2 2010
Contract Gross Profit up 1%* year on year and up 8%* on Q2 2010
Group Gross Profit up 15%* year on year and up 13%* on Q2 2010
Sales headcount growth of 25% year on year, driven by improving market
opportunity and additional international office openings
Permanent deal pipeline up circa 50% year on year
Cash position remains strong with circa 37m net cash at period end
Group gross profit achieved in the period increased by 15%* year on year to 43.0m (2009: 37.6m). UK gross profit increased by 2% year on year and by 8% on Q2 2010. Non-UK gross profit increased by 26%* year on year and by 16%* on Q2 2010. Non-UK now represents 60%* of gross profit (2009: 55%), non-ICT represents 39%* of gross profit (2009: 31%).
At 29 August 2010 SThree had 4,093 contract runners, a decrease of 2.3% year on year, but sequentially up 3.6% on the half year position (30 May 2010: 3,952). During the period SThree made a total of 1,690** permanent placements, an increase of 21% versus the prior year (2009: 1,395**) and up 13%** on Q2 2010. In the period, permanent placements represented 49%* of Group Gross Profit (2009: 42%).
At 29 August 2010 UK contract runners at 2,234 were down 11.6% year on year but up 0.4% versus the half year 2010 position (30 May 2010: 2,226). During the period, UK permanent placements were up 22%** year on year and up 11%** on Q2 2010.
At 29 August 2010 non-UK contract runners at 1,859 were up by 11.8% year on year and by 7.7% versus the half year 2010 position (30 May 2010: 1,726). During the period, non-UK permanent placements increased by 21%** year on year and by 14%** on Q2 2010.
Average permanent fees and Gross Profit Per Day Rates ("GPDR") both strengthened in the period. Average permanent fees were up 9%* year on year and up 3%* on Q2 2010, whilst GPDRs were up 10%* year on year and stable on Q2 2010.
Public Sector now accounts for circa 5% of group transactions (H1 2010: 7%)
The current deal pipeline indicates that the Group is experiencing improvements across all markets. At 29 August 2010, the number of permanent deals agreed in the period, with candidates due to start in the future, were up more than 50% year on year.
Total Group headcount at 29 August 2010 of 1,897 was up 26.0% year on year (2009: 1,506) and up 18.8% on the year end 2009 headcount of 1,597. UK sales headcount was up 17.8% year on year, and up 11.8% on the year end 2009 position. Non-UK sales heads were up 29.8% year on year and up 22.6% on the year end 2009 position.
During the period further office openings were agreed for Qatar, Houston and Antwerp with expected launch dates in Q4 2010 / Q1 2011.
The Group remains in a strong cash position, with net cash of circa 37m at 29 August 2010 and DSOs have reduced further to 36 days (30 May 2010: 37 days). The Group has committed facilities of 20m, which once again have not been utilised during the period.
Russell Clements, Chief Executive Officer, commented:
"Our performance is consistent with improving markets across almost all of the geographies in which we operate. Indeed, all markets with the exception of Benelux are now growing year on year and sequentially. That said, trading conditions, whilst improving, are still yet to fully recover to pre-downturn levels.
"Our most up to date view of the market is provided by our deal pipeline, which continues to look encouraging. In addition we continue to focus on sector diversification and taking further steps towards the globalisation of our business reflecting our commitment to building SThree for the longer term."
* at constant currency
** excludes both the gross profit and placement volumes of retained business